That is basically the gist of it. The premium will fluctuate throughout the life of the put so you can always buy it back as well. You will also probably have to put up the collateral to purchase the stock at $2 as well. So if the stock shoots up and the premium goes to like $0.05 you can buy it back and free up that money.
I usually sell puts for a stock that I want, but I don't want to pay the current price for. Instead of puttiing a gtc limit order buy in where my money just sits there useless, I just sell the put for the strike price I want (or sometimes slightly above, b/c the premium will offset it). Also sometimes if the IV is high and I really do want the stock, I will sell a way ITM put to increase my chances of getting the stock and lower the entry cost. Also you can buy a cheap OTM put to offset some of the initial collateral requirements when selling a put.
I usually sell puts for a stock that I want, but I don't want to pay the current price for. Instead of puttiing a gtc limit order buy in where my money just sits there useless, I just sell the put for the strike price I want (or sometimes slightly above, b/c the premium will offset it). Also sometimes if the IV is high and I really do want the stock, I will sell a way ITM put to increase my chances of getting the stock and lower the entry cost. Also you can buy a cheap OTM put to offset some of the initial collateral requirements when selling a put.